Does market participation impact profitability and per capita consumption? Evidence from lowland rice farmers in southern Ghana

Purpose This paper examines the impact of market choice(s) on profitability and per capita consumption among lowland rice farmers in southern Ghana. Design/methodology/approach Using a sample of 967 farmers, we employ the Multinomial Endogenous Switching Regression (MESR) to address self-selection and endogeneity biases, with a robustness check using the three-stage multivalued inverse probability weighted regression adjustment (3S-IPWRA). Findings The results reveal that market choice is significantly influenced by household, farm and institutional factors, including age, gender, access to agricultural extension and proximity to markets. Our results indicate that farmers who sell in both community and regional markets achieve the highest profitability (ATT = USD 362.1 per acre), followed by those selling only in district markets (USD 47.56 per acre over community markets). Additionally, the market choice with the highest profitability also exhibits the highest per capita consumption. Research limitations/implications The paper focused on lowland rice farmers which may limit the generalizability of findings to other crops. Future studies should therefore analyse the impact of market choice(s) on profitability and per capita consumption among other crop farmers. Originality/value Most of the related literature fails to examine the possible nexus between market choice, profitability and per capita consumption among agrarian households even though this is important for guiding policy and practice. We specifically bridge this gap in our study.